Sunday, December 27, 2009

Hope, hopelessness and faith

The trouble with hope is that it is so easy to do and so easy to dash. We hear people say that they hope so and so will get well or will get that scholarship he or she needs to attend college or get the job he or she has applied for. There is rarely a second step in this kind of hope. And, those to whom we pay this lip service hope can through circumstances or poor conduct very easily dash our hopes.

In the political world, we often place hope in the leaders we elect. We hope they will do the right thing, enact the right policies, appoint the right people. While there may be a second step in this process--that is, pressuring our political leaders to do what we want them to do--there is little a modern voter can do when arrayed against the money and lobbyists of the corporate world.

We often hear people say that it is impossible to live without hope, by which they mean hope for something better than the current set of problems we face. There may be something to this. To believe that an unbearable present will only be followed by an unbearable future is truly debilitating. But in a world of constant change we can be virtually certain that the status quo will falter at some point.

For those involved in issues of sustainability, peak oil, climate change, and relocalization it might be better to feel a certain hopelessness in our situation. For hope implies dependence on forces outside ourselves. Once we abandon that hope, we can get down to the tasks at hand, the tasks that need to be done--for which we need to ask no politician or government official permission--tasks that we can get started on today. In this way hopelessness concerning the current political and economic arrangements becomes an ally.

So, what we really need is not hope. Hope can be the enemy of action. Hope can be a drug that maroons us in cafes in long, satisfying conversations that never lead anywhere but back to the cafe the next night. In hope's place I nominate faith. Not religious faith, but what George Santayana calls "animal faith." The great American psychologist James Hillman describes it in his book "Inter Views" in this way:
[Animal faith] is faith in the world: that it is there, that it won't give way underfoot when you take the next step, that you just know which way to turn and how to proceed. It's the faith your hands have and your feet have.....the cat jumps on the tree and starts climbing. The tree is not an object of faith to which the cat gives assent. It is a tree in an ecological field belonging to the cat's climbing. The cat has an animal faith in the tree and it loves the tree, loves itself, loves jumping and climbing--no self-examination there, no introspection about belief.

Hope is part and parcel of our pathology, Hillman writes in "Suicide and the Soul." But faith, animal faith, is commitment to the moment, commitment to putting one foot in front of the other, to getting up in the morning and making breakfast. The day will bring what the day will bring. We do not need to "hope" for anything.

And, as we go through the day, our faith can grow. This is not a faith based on belief, but rather on experience, the experience we gain with each small act and the competence that grows in us as a result of those acts. Our faith can also grow as a result of the trust we build with others as we work with them for mutual goals.

So, as we look to the year ahead let us not "hope" for a better year to come. We will almost surely be disappointed and only rarely pleased as we sit on the sidelines watching. Rather let us focus on putting our "animal" faith to work on the tasks at hand and let our engagement be the joy of the new year.

Thursday, December 24, 2009

Why climate change adaptation could make things worse

My latest column on Scitizen entitled "Why Climate Change Adaptation Could Make Things Worse" has now been posted. Here is the teaser:
Because many of the proposals for adaptation to climate change require further extensive release of greenhouse gasses, they will only make climate change worse....Read more

Sunday, December 20, 2009

Technology will save us...or not

Technology will save us--it's the mantra heard around the world when it comes to climate change, fossil fuel depletion, and myriad other environmental and resource challenges. But, that mantra rarely comes with the proviso that technology often has unintended and even perverse consequences.

"Yes, yes," you will say, "we know that." Then, why, may I ask, is this almost never mentioned in the same speeches, op-ed pieces, and journal articles that tout the efficacy of one or another technology to definitively solve or at least help solve critical environmental and resource problems? It is because these pronouncements are polemics, or more properly, sermons meant to instruct us in the supposed invincibility of our technology.

Let us take just one example of a technology that is so ubiquitous that people rarely even think about a world without it: the automobile. The automobile was probably the signature technology of the 20th century, one that shaped culture and in turn shaped so many other technologies that serve our automobile-based culture. If humans had understood ahead of time that automobiles would result directly or indirectly in the following, would society have chosen to allow their widespread use?
  • Climate change
  • Health problems and mortality due to air pollution
  • Pollution of groundwater from decrepit gasoline storage tanks
  • Urban sprawl
  • Hollowing out of many American cities
  • Massive traffic jams
  • Dependence on unreliable foreign sources of oil
  • Serial military conflicts involving access to and control over oil
  • Paving and development of prime farmland and forest
  • Mass death and disability due to accidents on the world's highways
  • An obesity epidemic related to loss of walkable living environments
  • Massive public expenditures for roads, parking and other purposes related to automobiles (to the exclusion of other priorities)

I have not tried to be exhaustive. But, I think this list outlines just how deleterious the automobile has been not only environmentally, but also socially and economically. Now, of course, it would have taken exceptional clairvoyance to have foreseen all the perverse consequences I list. But that is just the point!

What allows those who are so confident about the salutary outcomes for their favorite technological fixes to pretend that there will be no perverse and even fatal consequences related to them? How can the technological optimists be sure that their solutions will not lead either to the opposite of what they intend or to other problems perhaps even more intractable than the ones they purport to solve? Perhaps the most readily obvious example is the notion that energy efficiency will result in a reduction of energy use. But the Jevons Paradox tells us that just the opposite happens by making energy cheaper due to a reduction in demand and thus subject to greater demand as more people take advantage of the lower prices.

The technological optimists seem to be unaware of how complex the energy, climate, forest, and other systems with which they propose to tinker are. They do not know the ecological dictum that you can never do just one thing. Each action ramifies outward into any complex system resulting in multiple unforeseen and often unwelcome effects.

But, all of technological optimism can be summed up in one desire: The desire not to have to change any of our current behaviors. And, yet it is our behavior that most of all needs changing. To be sure, even changes in our behavior can have unforeseen and sometimes perverse consequences. But I would venture that these unforeseen consequences would be far less troublesome than those related to new technologies provided that any changes in behavior are guided by two principles: 1) To increase the long-term resilience of human society and 2) to increase the margin of safety in the way in which we exploit the environment. For example, we could decide that the target for carbon dioxide in the atmosphere should be 350 ppm--below where it is today--as some advocate, instead of taking a chance that a much higher reading could put us past the tipping point that will lead to runaway global warming.

It is hubris to believe we can easily and precisely calculate the limits of extraction and pollution and then move right up to our artificially calculated limits and still achieve sustainability. Instead, we should take a path of much greater humility that acknowledges that we must build greater resilience and wider margins of safety into our physical infrastructure and our everyday practices.

Ultimately, I believe, we will be forced to live in a much lower energy society. And, that means that the set of behaviors that need to change most will be those that currently lead to overconsumption.

Sunday, December 13, 2009

No post this week

I am on deadline for a large writing project and have been unable to find time to write my usual weekly post. I expect to post again on Sunday, December 20.

Sunday, December 06, 2009

Reserves are bunk

Henry Ford is famous for having once said, "History is more or less bunk." He was, in fact, attacking tradition in an age of rapid technological and social change. Almost a century later we have a less ambitious observation which may not achieve the broad visceral appeal of Ford's statement, but one which may turn out to have a good deal of importance, to wit: Oil and natural gas reserve numbers are more or less bunk.

Let me introduce you to B. J. Doyle, vice president of operations for a small Houston-based oil and natural gas exploration company. Doyle's views on the oil and gas business have been on display for more than a year now at The Oil Drum, a site famous for its technical prowess and breadth of coverage when it comes to energy-related issues. On the site Doyle goes by the moniker Rockman, and through his frequent comments he has been trying to educate readers about the realities of the oil and gas business.

Now, he didn't actually say that oil and natural gas reserve numbers are more or less bunk. Nevertheless, that is a fair summary of what he told me when I spoke with him recently. To understand why an insider would cast aspersions on this sacred metric of the oil and gas industry, you need to know two things. First, Doyle doesn't have to please shareholders. The company he works for is privately held. Second, reserve numbers are meaningless unless they are indexed to a price.

Doyle began his explanation with a seemingly astounding statement: "One of the things we're least interested in is the amount of oil and gas that we are going to produce." How can this possibly be true? It turns out that the oil and gas industry uses a method common to nearly every modern business enterprise to evaluate its investments, namely, net present value analysis or NPV.

The concept is actually simple. If you have the choice of receiving $1,000 now or $1,000 three years from now, naturally you'd take the $1,000 today. That's because of what is called the time value of money. If you can invest the $1,000 today, say, in a bank CD, you can at least earn some interest in the next three years. Also, if you were foolish enough to wait for your money, inflation might undermine the purchasing power of that $1,000. The inflation calculator at the U. S. Bureau of Labor Statistics shows that it would take $1,072 in 2009 to equal the purchasing power of $1,000 received in 2006.

Every business knows that there are several ways in which it can invest its capital. So, business owners take the amount of the initial investment in, say, a new factory or a new oil well, and subtract that amount from the present value of what they forecast will be the future cash flows from that investment. If the amount is positive, then the project will be profitable and should be considered. If the amount is negative, the project should be abandoned. Of course, there are many factors when considering an investment, but a project that appears to be unprofitable will certainly not be considered.

Net present value analysis, however, doesn't describe the real world perfectly. This flows from the obvious truth that no one can actually know the future. One has to estimate the expected future cash flows. This is no easy feat when dealing with the uncertainties of yet-to-be drilled underground reservoirs, the challenges of operating producing wells, and the vagaries of the oil and natural gas markets. Then, one needs to apply a so-called discount rate. This process assumes that future cash flows received years down the road must be "discounted" to reflect the time value of money as described above. Doyle explains that discount rates applied in the oil and gas industry often range from 10 to 15 percent per year. He admits it's an arbitrary number, but it's arbitrary in every industry except perhaps as it reflects the presumed risks involved in the venture and the cost of capital (such as interest on loans).

When you work out what this implies for cash flow generated from a well several years after production begins, it becomes clear why the ultimate amount of oil and gas recovered from a well has little relevance to the decision to drill it. Let's do an example to see why. If you invest $3 million to drill a well (not an unusual amount these days) and expect to get cash flow of $1 million per year from the well for 10 years, on the face of it that sounds as if you are reaping more than three times your investment. But when you discount the cash flows appropriately, for example at 12 percent per year, you get an NPV of $5,650,223. That's $2,650,223 more than you are investing, so it's still a positive number even after discounting. And, it's 1.88 times the initial investment, a ratio that will become meaningful below. But the NPV of the $1,000,000 in annual cash flow in years 8, 9, 10 are as follows: $359,634; $316,478; and $278,500. (Remember: Each successive year's cash flow is discounted another 12 percent in this case until you get to the final year.) If the well keeps producing in year 20, the NPV of the cash flow in that year falls to just $77,562. If it is a very long-lived well, the NPV of the cash flow from year 40 is negligible, $6,015. All this serves to illustrate that the further any year's cash flow is from the present, the less valuable it will be to the company and therefore the less bearing it will have on a decision to drill a well.

As it turns out, few companies would even bother drilling such a prospect. Doyle says that right now his company won't even look at a prospect unless, based on seismic data and other information, it reasonably expects that the completed well will produce an NPV six or more times that of the initial investment. When there is keen competition for prospects, companies will drop their expectations down to three to four times the NPV.

This is where things get interesting. Doyle has seen some public companies drop their goal down to one. That's right. They will drill prospects that they believe have no reasonable chance of doing anything other than breaking even. Why will they do this? To boost stated reserves, a number by which Wall Street judges the value of oil and gas companies. They won't, however, make any true profit on these wells. But they will become what Wall Street calls an "asset play." They will be valued on their assets, in this case stated reserves, rather than on their profitability. This strategy has proven especially tempting to those engaged in the hunt for shale gas since drilling success rates are very high. This is a risky strategy, however, that leaves little margin for error. Prices lower than those forecast by such an analysis could quickly bankrupt a company that drills too many wells based on an assumed one-to-one ratio of investment to net present value.

The claims that the United States has 100 years of recoverable natural gas as a result of the newly accessible shale basins has no meaning without attaching a price to it, Doyle contends. The fact that major shale gas producers have trimmed their active drilling fleets to a fraction of what they were during the 2008 boom in natural gas prices proves that price is a critical factor in determining whether to drill. And, where there is no drilling, there are no additions to reserves. The natural gas market has shown itself to be highly volatile which has not surprisingly led to wide swings in natural gas drilling. The notion that somehow there will be a consistent accretion of natural gas reserves from year to year or that all discoveries from previous years will still be considered reserves in a low-price environment is pure bunkum.

The same logic applies to oil discoveries. But these days no one is claiming the United States has enough oil left to supply the entire country for 100 years. And, so hype about oil reserves is less of an issue.

The upshot is that expected cash flow determines what areas will be drilled, not the size of potential reserves. Most companies won't drill a prospect unless they believe they can get their money back within two to three years, Doyle says. If it takes four or five years, the prospect is not very attractive. Cash flow is king.

It turns out that the NPV of the first three years of cash flow from my hypothetical well mentioned above is $2,401,831, less than the initial investment. Most companies would or should pass on such a prospect, and it would therefore never become part of anyone's reserves, he explains. Part of the hype over shale gas has to do with the claim that the wells may be very long-lived, he adds. Even if that turns out to be true--not a certainty as of now--the low flow rates expected after the initial burst of production and the distant payoffs would actually work against any decision to drill such wells. No wells, no reserves.

Doyle says that given modern technology, oil and natural gas are easier to find than ever before. But he doesn't believe that in North America at least, there is that much more to find. He thinks that shale gas in North America my indeed prove to be plentiful. But it will not be both plentiful and cheap.

And, of course, if we succeed at expanding natural gas production to meet the needs of a new natural gas-powered vehicle fleet--an idea advocated by one of the leading producers of shale gas--and expand other current uses such as the generation of electricity, we can expect that natural gas prices will soar. That may provide the necessary incentive (i.e. cash flow) to extract the shale gas that lies below the American landscape. But it will also certainly mean that the 100 years of supply that has been so frequently touted in the media will rapidly shrink to perhaps 30 or 40, and that the peak in production will come much sooner.

A peak in natural gas production in, say, 20 years would not exactly be a useful talking point for those advocating the wholesale conversion of key parts of the U. S. economy to run on natural gas. Just as we would be finishing such a conversion, we could find ourselves on the downslope of the natural gas production curve and faced with the urgent need to adapt our costly and newly completed natural gas infrastructure to run on some other energy source.

Sunday, November 29, 2009

Taking a Break--Happy Thanksgiving!

I am taking a holiday break and expect to post again on Sunday, December 6. Happy Thanksgiving!

Sunday, November 22, 2009

The trouble with apocalypse

Although for us the End has perhaps lost its naive imminence, its shadow still lies on the crises of our fictions.

When you read, as you must almost every passing day, that ours is the great age of crisis--technological, military, cultural--you may well simply nod and proceed calmly to your business; for this assertion, upon which a multitude of important books is founded, is nowadays no more surprising than the opinion that the earth is round.
                                      --Frank Kermode, The Sense of an Ending

The trouble with apocalypse is that most people have already seen it at the movie theater, watched it on television, read it in a book, or heard all about it from the pulpit. So inundated with the language of crisis are we that we have become immune to it. From the perspective of the historian our age has been chock full of "great transformations." And, it is, after all, the historian's business to write about great change even if he or she has to invent some.

The great energy crisis of the 1970s passes and is followed by an era of cheap energy lasting more than 20 years. The great run-up in energy prices in recent years is followed by a collapse in prices. The "worst economic downturn since the Great Depression" is now being followed by a ceaselessly heralded recovery. The much feared Y2K computer bug was either fixed or of little consequence on January 1, 2000. A modern plague has been in the wings for years, first as SARS and then as avian flu. Now that the H1N1 virus is here, it doesn't seem like the civilization-destroying event it was advertised to be. Even such events, despite the drama they propagate, create a certain cyclical continuity making them seem not all that remarkable. Once the worst is over or the predicted crisis fails to materialize, the fear that most people felt fades from memory.

Yet, the "cultural crisis," the "economic crisis," the "health care crisis," the "education crisis," and the "national security crisis" somehow continue. We momentarily look away from our computers, cellphones and flat screen TVs. Then, we are back again to our routine. Yesterday we had email, today we have email, tomorrow we will have email. On the short view, nothing much seems to have changed. The world appears to be moving closer to the technological utopia we have been promised.

For human beings, the apocalypse in its many forms "is a figure for their own deaths," Frank Kermode remarks in his classic of literary criticism, The Sense of an Ending. He adds, "[W]hat human need could be more profound than to humanize the common death?" And, so we are wired to listen, at least temporarily, whenever a storyteller of any type on television, on radio, on the Internet, in movies, and on the printed page hoists the flag of crisis. Any reference to crisis improves ratings and book sales. If what you're telling me isn't a crisis that requires my immediate attention, perhaps it can wait until later when I'm through looking at my email or watching my favorite spinoff of Law and Order.

Such is the environment in which those concerned about sustainability for human society find themselves. Peak oil, climate change, an impending food crisis, a water crisis, none of these truly captures the imagination of the broader public and rouses it to action. Perhaps the public is suffering from apocalypse fatigue. But that would be an incorrect assumption. One need look no further than the movie screen this holiday season. The movie 2012, a series of visual explosions based on various disaster scenarios and end time prophecies, is a runaway hit. The movie trailer tells us that one particular day in 2012 will be a moment that unites us all, very much "the common death" that Kermode discusses. And, the movie is not a cultural one-off. The same director gave us the climate change thriller, The Day After Tomorrow, which has grossed nearly $200 million at the box office. The appetite for apocalypse is endless and perennial. When I was in seventh grade (a long time ago), Alas, Babylon, a novel about a small town that survives after a nuclear war, was actually required reading.

What apocalyptic narratives do is elevate the importance of the trajectory of every person's life regardless of his or her station in society. If we're all in this together, then we can share in a great destiny no matter who we are. But destiny sounds like fate. What can one do if one is headed toward a great apocalypse? Pray, perhaps. Repent, maybe. But responding to such a gargantuan event calls more for attaining the right relationship with one's god than engaging in constructive social and political action.

While apocalyptic stories may seem as if they are about our collective path, for the individual they are really about an inward journey. That is why they can be quite good at filling movie theaters, bookstores, and churches. And, that is why appeals to the apocalyptic strain in culture are wrongheaded when attempting to move people toward actual concrete steps that can improve our collective prospects amid the unfolding calamities of the 21st century.

Sunday, November 15, 2009

Amelia Earhart and the complexity problem

As I watched the recently released film about Amelia Earhart, I couldn't help thinking about parallels between her journey and ours as an industrial culture. The Earhart in the film noted that her path up to time when she attempts to circumnavigate the globe had been free of major mishaps and had led the public to underestimate the dangers of flying. When she attempts to fly around the globe, she has her first major accident which occurs early in the trip. It happens during takeoff and leaves the plane heavily damaged, but the occupants intact. Despite this, she makes repairs and begins her fateful second attempt three months later.

What struck me about this audacious trip was how many things had to go right every step of the way: the weather, the availability of fuel and supplies, correct navigational guidance from the expert navigator who accompanied her, the cooperation of those on the ground (especially worrisome in countries that had only rudimentary aviation infrastructures), and, of course, the mechanical and electrical integrity of the plane and its equipment.

There are many theories about what brought Earhart's flight to an end somewhere over the Pacific Ocean. One suggested cause was simple poor planning and preflight checking. The plane may not have been fully refueled before taking off from New Guinea to cross the Pacific.

The public had perhaps been lulled by Earhart's past successes into believing that she would succeed in any bold undertaking. In the same way we today believe that our vaunted technology will solve every problem we face including finding enough food and energy for a population that is estimated to hit 9 billion by mid-century while simultaneously addressing global warming. All of this will, according to our current ethos, be accomplished as the standard of living for billions across the globe is raised to that currently enjoyed by wealthy countries.

Earhart lost her way on the final leg of her journey because of multiple breakdowns: The direction finder on the naval ship stationed near the island where she was to land and refuel lost battery power; the radio operators on the ship could hear Earhart, but she could not hear them; the antennae of Earhart's plane may not have been well-suited to the needs transocean flights; a flight pattern meant to bring her plane over the island may have been incorrectly calculated.

Like her, our civilization does not realize that it may not have enough fossil fuel to make the transition to a renewable energy economy. To build such an economy we will have to use current energy sources which are mainly fossil fuels. If we squander that patrimony on current consumption and continued growth, we may find our energy infrastructure inadequate to our needs as the fossil fuel age winds down. And, like Earhart, we are not getting the proper feedback to tell us what to do, she from her radio and we from the market economy which fails miserably to anticipate and properly signal us concerning long-term challenges such as global warming and fossil fuel depletion.

Unlike Earhart, we as a civilization do not seem to understand the difficulty of our journey, that is, our necessary journey toward a sustainable system. She had expert navigational advice and at least a modicum of trepidation about what dangers lay ahead. We as a civilization are relying on such directional beacons as Daniel Yergin, Julian Simon, and a broad cabal of cornucopian economists across the world to guide policy, and their message amounts to,"Don't worry, be happy." The result is that nascent efforts to meet the ecological challenges we face are being overwhelmed by the imperative of growth at any cost. That growth is wiping out gains in sustainability not only by negating attempts to reduce greenhouse gas emissions and pollution of all types, but also by negating attempts to preserve and restore the fertility of the land and the productivity of the oceans.

We might as a civilization be able to address global warming. And, we might be able to address energy supply problems both by shifting to renewable sources and drastically economizing on energy use. And, we might be able to address the growing problems of soil degradation and food supply. And, we might even be able to devise a way to raise significantly the standard of living for billions (so long as we define that standard not simply as personal consumption) while minimizing our use of resources. But having to face all these problems at once significantly reduces our chances of solving any of them. In fact, they are all interrelated, primarily through the fossil fuel energy that is a significant contributor to global warming and the enabler of a modern agriculture. That agriculture, in turn, is simultaneously undermining the productivity of the soil while allowing us to feed (temporarily) an ever-growing population that consumes more and more resources every year.

Earhart had it much simpler. If any one of the problems cited above had not occurred, we might well be talking about Earhart's successful aerial circumnavigation of the globe.

Her aims were singular and focused: Get around the world in a plane. Ours as a civilization are multivariate and contradictory. Economic prosperity for a larger proportion of a growing population under our current infrastructure requires greater burning of fossil fuels, not less. Greater production of food requires either more land cultivation in the face of increasing urbanization which destroys farmland or more energy-intensive farming; either of these will only worsen global warming. Reducing global warming requires drastically less burning of fossil fuels and the reallocation of resources toward the deployment noncarbon-based energy on a scale and a schedule that would seriously erode people's standard of living, that is, as measured by current consumption.

Unlike Earhart who despite the complexities of her endeavor might have survived if she had gotten one lucky break, we are faced with needing virtually all our attempts to address critical problems to succeed simultaneously even though our current solutions are leading us in contradictory directions.

Sunday, November 08, 2009

Immigration and our ecological predicament

Whenever the word immigration is mentioned, two polarized camps almost immediately emerge. One camp considers new residents an asset, bringing new ideas and entrepreneurial zeal to a society, while the other considers immigration a bane, bringing crime, disease, poverty and culturally disruptive practices.

Only very rarely mentioned by those opposing immigration is a concern that the host country has run out of carrying capacity and cannot afford to feed, clothe, educate and keep healthy any more people. Immigration opponents may claim that their home country cannot afford additional people. But, by this they do not ordinarily mean that the population and the economy of the country should cease to grow. They simply mean they do not wish to share any growth with newcomers.

The carrying capacity of many industrialized nations was probably reached several decades ago. If a country imports critical resources--oil and food come to mind--then it has in all likelihood overshot its carrying capacity. So, while lack of carrying capacity has some validity as an argument against immigration, it is difficult to apply in a globalized economic environment. This is because most wealthy countries import a significant portion of their carrying capacity. The destruction resulting from this importation takes place "over there" where the forests are leveled, the land is eroded, the mines are depleted and the rivers are poisoned.

Those in the importing country simply do not feel the effects of that undermining of world carrying capacity and therefore assume that carrying capacity has not been reached or at least that it has not been impaired by the standard of living in the importing country. The usual retort is that the water and air are cleaner today than they were 30 years ago in the importing country. What's not mentioned, of course, is that the damage the importing country is doing through its consumption has simply been shifted elsewhere.

Now, if we reframe the issue not as one of immigration, but rather as one of mass migration, we will complicate things even further. For much of the migration we are seeing today is from countries which export resources to wealthy nations. In other words, we are seeing mass migrations from resource exporting countries where carrying capacity is being systematically undermined toward countries that are importing that carrying capacity.

One concrete example is Mexico which has been exporting its carrying capacity in the form of oil for decades. It has also been exporting other minerals and foodstuffs as well. As oil production plummets in Mexico, the ability of the nation to function has become impaired. The government is having trouble keeping its population safe from drug cartels which now control a significant share of the country. Jeff Vail, a contributor to The Oil Drum and a former U. S. Air Force intelligence officer wrote in 2007 that he believed that Mexico was already on the path to collapse. He updated his views earlier this year and sees the process is actually further along.

What this means is that the already substantial flow of immigrants from Mexico into the United States is likely to turn into a torrent as economic opportunities and personal safety decline in Mexico. A government that relies on oil profits for 40 percent of its budget will be hard pressed to provide the economic activity and the social services to satisfy all of its population as oil profits continue to decline with oil production.

As similar dramas unfold elsewhere--Vail mentions Nigeria and Iraq--we can expect a rise in the tempo of migrations from countries that are exporting their carrying capacity to countries that are importing it. This will no doubt be accompanied by calls to limit immigration. If the flow becomes great enough, it might result in military action to close borders, at least temporarily.

If policymakers do not recognize that the decline in carrying capacity is one of the key drivers of contemporary mass migrations, they cannot hope to address the situation. And, simply shutting the borders when the flow of people becomes too great may turn out to be problematic for those wealthy countries that currently import a substantial share of their carrying capacity. How will they maintain an orderly flow of imports while at the same time exclude people who are not legally allowed to enter?

It would be felicitous if new policies were enacted to raise carrying capacity by drastically reducing consumption in wealthy countries and gradually reducing population everywhere. As long as consumption in wealthy countries remains at or near its current levels, those countries will continue to be on a collision course with mass migrations born of ecological overshoot and skewed trade relations--trade relations which have for so long allowed the wealthy to export their environmental degradation elsewhere and saddle the poor with the consequences.

Sunday, November 01, 2009

The peace movement and the cornucopian view

If you want peace, work for justice.
            --Bumper Sticker (originally from the New Year's Day message of Pope Paul VI, 1972)

The above statement seems so much a truism that when someone says it, we rarely think to inquire about what the speaker means by either peace or justice. Let me formulate it this way. By peace, I will mean the absence of violent conflict within or between nations. By justice I will mean the just distribution of goods and services including such services as education and health care and the upholding of internationally recognized human rights for all people. I take this to be a good approximation of what those who say the above words or stick them on their car bumpers mean.

One key assumption behind such a formulation is that worldwide there is enough of all the essentials of a good life to ensure every person on the planet a decent existence. By decent I mean one characterized by good health and nutrition, adequate education and chances for advancement intellectually, culturally, materially and even spiritually. There may indeed be something to this assertion. According to the CIA Fact Book the estimated gross world product in 2008 was $69.62 trillion. Divide that by the current estimated population of 6.794 billion and the result is $10,247. That's $10,247 for each man, woman and child on Earth--not a princely sum, but certainly enough to provide a family of four in, say, India or Zambia a comfortable existence. Naturally, the cost of living is higher in rich countries, but then the public services and infrastructure are usually much better as well.

Such a distribution of the world's wealth is not only a political impossibility, but it would be seen by very many as unjust. This is because no one would be rewarded for efforts that produce a disproportionate amount of wealth, and many others who produce nothing would be given a windfall. The problem of incentives would intrude on such a leveling scheme; many would choose not to work in the face of a guaranteed income at this level. And, that begs the question of who would be left to work knowing that he or she could receive no more than the world average.

Such is the general outline of arguments by those who oppose any scheme of aid within and between countries. In practice certain European countries have achieved healthier, more productive, and less crime-ridden societies by guaranteeing minimum incomes as well as health care and other essential services. Nowadays, the aim of peace and justice advocates in this regard is usually to allow those at the bottom of the economic scale to reap a greater share of the benefits from economic growth. This is in lieu of taxing the existing wealth of the rich for immediate redistribution. And, here we get to the issue announced in the title of this piece: Most economic justice work is currently premised on the view that greater economic equality requires continued economic growth.

As such, those operating under this view assume that the natural resources required to attain the needed growth will continue to be available in the quantities required at prices that will make such equality possible. In other words, the seemingly politically impossible task of redistributing wealth will be sidestepped in favor of redistributing current income from future growth. This constitutes a wholehearted embrace of a cornucopian future; it recognizes no limits to growth that are implied by climate change, world peak oil production, and the rapid depletion of other resources including metal ores, water, soil and fish. And, if any of these limits are acknowledged, the resulting problems are assigned to the "technology will save us" category.

This is an important hidden assumption behind much (though certainly not all) peace and justice work. I've been thinking about this issue since being on a panel for an International Day of Climate Action event in my city. One of the issues the people who attended brought up was the enormous amount of military spending in the world, particularly by the United States. No doubt much of it is simply wasted, not even providing what the military strategists say they want. This includes fraud by contractors in pricing and quality, weapons systems forced on the military that it does not want or need, and inefficiencies of all kinds that are inevitable in any bureaucracy as large as the U. S. military establishment. People in attendance at the event also made arguments opposing America's two ongoing wars in Iraq and in Afghanistan.

But missing from the discussion--missing, that is, until I brought it up--was the primary reason the United States has soldiers deployed all over the world, namely, to protect (or arguably, to dominate) points of supply and transport routes for critical resources in which the country is no longer self-sufficient. Chief among these is oil, though the list includes all the major metals and a host of other critical items including fertilizers and natural gas. I suggested that our foreign policy is largely shaped by this deep dependency on the outside world for the basic materials that underpin our modern way of life. Until that dependency goes away, it is unlikely that our foreign policy will be re-oriented.

Therefore, I suggested a reformulation of that shibboleth so often heard in peace and justice circles as follows: If you want peace, consume a lot less. It's not nearly as inspirational as Pope Paul's original words, but in my view it is a truism nevertheless.

Sunday, October 25, 2009

Speaking the unspeakable

Legendary oilman T. Boone Pickens has managed to say in public what many policymakers and pundits who championed the invasion of Iraq only think to themselves, namely, that oil companies based in the United States are "entitled" to access to Iraq's oil fields because of the American treasure and blood expended in the Iraq war.

It is a curious logic, but entirely in keeping with the mindset of those who say so-called resource nationalism is preventing the Earth's supposed bounty of oil from reaching global markets. (More on that below.) When you parse Pickens' statement it amounts to something like this: Corporate interests based primarily but not exclusively in the United States should be awarded a share of the work in Iraq's oil fields which is currently being parceled out by the Iraqi government because the U. S. military engaged in a hostile invasion of the country followed by a troubled and often deadly six-year occupation.

If one were thinking strictly in terms of the spoils of war, one might make the case that the soldiers of the victorious army should get some share of Iraqi oil wealth--though I doubt the Iraqis would find such a case compelling. But how does one make the case for U. S. oil companies plundering profit from the handiwork of soldiers employed by the United States and by the other countries involved? Doing so would be a public admission that the Iraq war was fought for access to oil and the opportunity to award the profits from that access to favored corporate interests headquartered in the United States. Just how would the soldiers who fought in the conflict feel about that?

And yet, this would be the logical outcome of the resource nationalism argument made by so many oil supply optimists. To review: Resource nationalism is a term which refers to the control of national resources within a border of a country by its government, whether done directly through ownership or indirectly through policy and taxation. Oil optimists love to say that there is plenty of oil in the ground. It's just that the countries that control the reserves are either hoarding them or are incompetent at getting them out of the ground. And, since national governments essentially control 88 percent of the known reserves, the oil optimists say we must place the blame largely on those governments for oil scarcity.

What then are we to do if those governments don't correct the situation to our satisfaction? Boone Pickens has given one answer that some policymakers believe is necessary, but dare not say publicly: Force those governments to produce more oil in accordance with our needs using intermediaries, i.e., U. S. oil companies, to guide such increases in production.

If peak oil is indeed upon us, you can be sure that thinking like this will increasingly animate the war-making councils of oil importing nations even as they dither in making the difficult but necessary decisions to move toward a post-oil society.

Friday, October 23, 2009

Resource nationalism: The last stand for the oil optimists

My latest column on Scitizen entitled "Resource Nationalism: The Last Stand for the Oil Optimists" has now been posted. Here is the teaser:
The price of oil has more than doubled from its nadir of $30 a barrel earlier this year. To explain the resilience of oil prices in the face of a severe economic slump, the oil optimists have turned to an old standby argument: resource nationalism....Read more

Sunday, October 18, 2009

Sound familiar? Oil and natural gas 10 years apart

Compare these statements concerning oil and natural gas made a decade apart:

Oil in 1998-99:

[I]f you're still operating under the assumption that the earth's petroleum--or at least the cheap stuff--is about to run out, you're not going to thrive in the new oil era. Technology is making it possible to find, produce, and refine oil so efficiently that its supply, at least for practical purposes, is basically unlimited.
            --BusinessWeek, December 14, 1998

With oil prices projected to stay low, companies are dismissing employees and cutting the spending that is crucial to finding the oil they will sell in the future.
            --The New York Times, December 26, 1998

Now, as oil prices languish at the lowest levels in more than a decade, contractors like Diamond, the R & B Falcon Corporation, the Noble Drilling Corporation and the Rowan Companies are taking rigs out of service as rents slide.
            --The New York Times, January 2, 1999

[T]he situation looks so gloomy that Crown Prince Abdullah of Saudi Arabia warned starkly in December, ''The boom days are over, and they will not come back.''
            --The New York Times, January 16, 1999

Baker Hughes Inc., the third largest United States oilfield services company, said the number of rigs drilling for oil and natural gas in the United States had fallen to the lowest level since 1947.
            --The New York Times, January 26, 1999

Yet here is a thought: $10 [a barrel] might actually be too optimistic. We may be heading for $5.
            --The Economist, March 4, 1999

Natural Gas in 2008-09:

U.S. natural gas reserves are far more plentiful than previously estimated, says an industry study being released today - a discovery that heralds a potential remedy to the energy crisis. The report says the U.S. has up to 50% more natural gas reserves than earlier projections because of higher-than-expected yields from 22 shale formations in 20 states.
            --USA Today, July 30, 2008

Given the current gas supply/demand situation, [John Walker, the chief executive officer of EV Energy Partners] sees gas prices falling into the $3-$4 per Mcf range that will create serious economic challenges in the gas and energy industries. He thinks gas storage will be full by September 1st and that could lead to $1 per Mcf gas as gas-on-gas price competition develops.
            --Rigzone, January 21, 2009

The number of rigs drilling for natural gas in the United States fell 15 to 685 this week, the first time below the 700 benchmark since late November 2002, according to a report on Friday by oil services firm Baker Hughes in Houston.
            --Reuters, June 12, 2009

Years of worry about supply shortages because of the maturing of conventional supplies have been replaced by worries there aren't enough customers for the 1,200 trillion cubic feet of natural gas in shale deposits -- enough to last a century -- found in the past three years, plus liquefied natural gas coming from offshore that is "needed like a hole in the head," Mr. [Steve] Letwin [vice-president, gas transportation and international, at Canadian pipeline giant Enbridge Inc.] said in an interview.
            --Financial Post, June 15, 2009

The amount of natural gas available for production in the United States has soared 58% in the past four years, driven by a drilling boom and the discovery of huge new gas fields in Texas, Louisiana and Pennsylvania, a new study says. The report, due to be released Thursday by the nonprofit Potential Gas Committee, concludes the U.S. has more than 2,000 trillion cubic feet of natural gas still in the ground, or nearly a century's worth of production at current rates.
            --Rigzone, June 17, 2009

BP Plc, Europe's second-largest oil company, forecasts that [world] gas resources may rise 60 percent to 100 years of global use at current rates, helped by unconventional sources that are undeveloped or unidentified.
            --Houston Chronicle, October 9, 2009

A new technique that tapped previously inaccessible supplies of natural gas in the United States is spreading to the rest of the world, raising hopes of a huge expansion in global reserves of the cleanest fossil fuel.
            --The New York Times, October 9, 2009

Big players in the LNG market like Repsol YPF, Total and Qatargas, which oversees some of Qatar's huge LNG industry, predicted this week spot gas prices will remain mired near current low levels until well into the next decade.
            --Reuters, October 10, 2009

At turning points most market observers and participants are of the same mind. That doesn't mean the bear market in natural gas can't continue, perhaps for quite a while yet. But the idea that gas will remain cheap and plentiful for decades because of technological breakthroughs sounds too good to be true, and it probably is. Dave Cohen offers a corrective to this vision in his piece, "A Shale Gas Boom?"

Of the many problems not apparent in the above quotations concerning natural gas, two loom large. The shale gas resource is undoubtedly vast. But the key question is at what rate can we produce this shale gas. I've used the following analogy many times before, but it bears repeating: If you inherit a million dollars with the stipulation that you can only withdraw $500 a month, you may be a millionaire, but you will never live like one. We may all be natural gas moguls, but will we ever live like natural gas moguls?

The second big question is how much energy will be required to get the shale gas. The financial costs of getting it are one indication. A key industry insider who heads the country's largest independent shale gas driller said last year that a sustained natural gas price above $6 per mcf is required to grow gas supplies. In truth, a price above $10 per mcf might be needed to get the massive quantities of shale gas touted by the industry. The industry is now drilling the sweet spots in the various shale formations. As they explore further, it will become harder to extract the remaining gas. That means more energy will be required per unit of gas. At some point, shale gas will cease to be worth extracting meaning much of the resource will remain in the ground.

Perhaps the technology will improve. But will it improve quickly enough to offset the increasing difficulty of extracting the shale gas resource as the more easily exploited areas deplete?

There are myriad other issues as well with both conventional and unconventional natural gas:
  • High depletion rates, as much as 65 percent for shale gas wells within the first year, and 30 percent per year on average for all North American gas wells.
  • Pollution of drinking water aquifers from chemicals dissolved in the water used to fracture shale gas formations, a process that is necessary to allow the gas to escape.
  • The availability of capital in a depressed economy and industry to pay for expanded exploration and drilling for both conventional and unconventional gas.
  • The availability of rigs and other equipment needed for a geometrically increasing drilling rate for shale gas necessary both to maintain existing production (in the face of the rapid depletion of wells) and to grow supplies.
  • The possibility that conventional natural gas production in North America may be nearing a cliff that unconventional supplies simply won't be able to compensate for.

We heard the same kind of optimism about supplies (and pessimism about prices) just before oil began its historic ascent from $10 a barrel to $147. Given what we know about consensus predictions for fossil fuel prices and supplies, would it be wise to accept the current consensus on natural gas?

Sunday, October 11, 2009

The purpose of it all

The human search for meaning is a timeless theme and central to our existence. That search has led to complex religious doctrines about the afterlife and how one will be rewarded or punished during it depending on one's record in this life. It has also led to entirely humanistic interpretations of life's meaning, probably most aptly exemplified by Existentialism which very broadly states that humans by acting in the world are in the process of making their own meaning.

But it is John McPhee, that fabulous writer about the geology of the United States, who has given me the insight as to what the "true" purpose of humankind is. McPhee has impressed upon me the rather counterintuitive fact that humans are a geologic force. In his 1993 book, Assembling California, he describes an entire landscape transformed by hydraulic gold mining during the California Gold Rush:
To the south, across the highway, the scene dropped off into a deep mountain valley. The near end of the valley was three hundred feet below the trees above us. The far end of the valley was nearly twice as deep. A mile wide, this was a valley that had not been a valley when wagons first crossed the Sierra. All of it had been water-dug by high pressure hoses. It was a man-made landscape on a Biblical scale. The stand of ponderosas at the northern rim was on the level of the original ground.

More recently, some scientists have come to believe that human activities are bringing about an entirely new geologic age. And, therein seems to lie our purpose, to alter the landscape and the atmosphere to such a degree that we bring about wholly new conditions on Earth.

How do I know this? Simple logic. First, economist Herman Daly has very compellingly explained why growth in developed nations has become "uneconomic." The short version is this: Marginal costs are exceeding marginal benefits. Yes, growth produces more of what we call wealth; but it also degrades the air, water, soil and climate, all of which are necessary for us to produce and enjoy wealth, but more important, essential to our survival. The costs to the environment and the social costs associated with high inequality are greater than the benefits of economic growth. The rather touching concern by the rich for the plight of the poor in a hypothetical no-growth or steady-state economy can easily be explained. In a steady-state economy we would have to be much more concerned about the distribution of wealth, not its mere accumulation. As Daly puts it, "We are addicted to growth because we are addicted to large inequalities in income and wealth. What about the poor? Let them eat growth! Better yet, let them feed on the hope of eating growth in the future!"

Only a small portion of the population, the owners of capital, are now benefitting from growth, i.e, they are getting much richer at the expense of the ecosphere that supports human and all other types of life. Since the defenders of this system never use this as a reason to continue economic growth, we must look elsewhere for the "true" reason.

Here we must posit some far-reaching, perhaps divine plan which I will call geological evolution. Ever since the Earth buried much of its atmospheric carbon in the aptly named Carboniferous Era, there has been no efficient mechanism for reintroducing it back into the atmosphere, that is, until the industrial revolution. But even with the discoveries about the effect of human activities on the climate--primarily through the burning of carbon entombed in the form of oil, natural gas, and coal--we as a species seem determined to continue on our current trajectory. Our overpopulated, high-energy society has begun to deplete the ocean of fish, destroy the fertility of soils, and use up all the rich metal ores. And, yet we continue.

And, providing the justification for continuing down this path are cornucopians such as Julian Simon, Daniel Yergin, Peter Odell and now Roberto Aguilera (an admitted devotee of Julian Simon). They believe we have far more carbon-based fuels yet to burn and that we should definitely burn them. In fact, they largely see this development as not just preferable, but inevitable.

So herein must lie our ultimate purpose as a species during our brief appearance on planet Earth, to wit, to initiate an unstoppable warming of the planet through the reintroduction of naturally sequestered carbon into the atmosphere and thereby usher in a second carboniferous era. Tens or even hundreds of millions of years after that perhaps another species will discover the carbon that will once again have been sequestered and decide to start the cycle all over again. It is a fate that only the god who punished Sisyphus would find satisfying.

Sunday, October 04, 2009

National parks and the idea of conservation in the fossil fuel age

In the past week many people have been watching Ken Burns' latest documentary film, The National Parks: America's Best Idea, on television. The series is a moving tribute to the men and women who saved some of America's most stunning landscapes from the greedy hands of the mining, timber and development interests.

As we have come to expect from Burns, the caliber of the storytelling, the cinematography, the soundtrack and the narration are top flight, and I recommend the series. My focus, however, is not on the film itself so much as on what the story tells us about the relationship between the idea of conservation and the fossil fuel age in which the national parks were established and expanded.

It is clear that Burns' history of the national parks is meant to convey that the creation of the parks was a reaction against the grimy industrialism spreading across the United States in the 19th century. Beautiful places were being encroached upon. Often, it was individuals who valued those places who took up the fight to protect them. And, quite often the cry was: "Not another Niagara Falls." The idea was to protect other special landscapes from commercial exploitation so that visitors could see them as they were when Europeans first set eyes on them.

And, here is the first omission from the story. We are told that such places had to be protected from human exploitation if they were to retain their aesthetic and spiritual appeal. But these landscapes had already been exploited by Native Americans for centuries for food, water, clothing, shelter, and even spiritual purposes. It's just that these native peoples generally had done so in ways that neither destroyed the beauty nor depleted the resources of these places. It is our modern methods of exploitation, our numbers and our consumptive habits that threatened these unique landscapes.

Second, some of those who championed the creation of the national parks were made rich by the very extractive and transportation industries that threatened the parks' beauty. Railroad tycoon Charles Shelton and John D. Rockefeller, Jr., son of oil titan John D. Rockfeller, come to mind. The railroads, of course, made it possible for a great many more people to travel to remote places for work and for leisure. The positive role of the railroad companies in advocating for the national parks is well-covered in the film. But railroads also made it much easier to transport to market the resources extracted from remote places by the very industries that threatened the parks. Coal and then oil extracted from the Earth, usually in ruinous ways, were used to power those railroads and much of industry as well.

As touching and heroic as the concern of Shelton and Rockefeller for unspoiled scenic beauty was, these men were, in fact, exemplars of a system that made national parks a seeming necessity. Before the industrial age, what are now national parks were just places where people lived, foraged and hunted.

Third, if one has seen some the country's national parks--I was recently in Utah at Zion and Bryce Canyon--it is not hard to understand why John Muir and others have spoken of such landscapes as places of spiritual awe and renewal. To paraphrase President Theodore Roosevelt, these are landscapes God has shaped through the ages and that man cannot improve. Thus, we have the dichotomy. The vast majority of the Earth's surface is ripe for improvement. Only certain small tracks of unusual topography, vegetation or wildlife are perfect as is.

Of course, we must remember that these progenitors of the national park idea lived on an Earth that had only a fraction of the population we have today. The notion that we could exhaust the world's resources or change its climate and in the process endanger the very survival of the human species was unthinkable. Coal, iron ore, timber, petroleum, copper, fish and land seemed limitless compared to the needs of the current population or even the needs of any future population.

And, herein lies my fourth point. The age in which the national parks were established was an age in which people could be made to believe that saving a few wild areas would in no way hamper the continued material progress of humankind. There have always been those who wanted to exploit the ready riches which lie in such landscapes. But today in the face of escalating energy prices, it has been all too easy for the American Petroleum Institute to succeed at convincing the American public and the Congress that the United States must open as much area as possible to oil drilling.

As the fossil fuel age winds down, will the public be so amenable to setting aside additional landscapes, keeping them out-of-bounds to extractive industries? Will it even be willing to defend the national parks we already have? I wonder.

Thursday, September 24, 2009

Oil optimists grow more outlandish

My latest column on Scitizen entitled "Oil Optimists Grow More Outlandish" has now been posted. Here is the teaser:
As the troubling realities of future oil supplies begin to penetrate official circles, the oil optimists are making even more outlandish claims.....Read more.

Sunday, September 06, 2009

Taking a break for September

I will be taking a break from posting for the month of September while I travel to do research for a large writing project. I expect to post again on October 4. Meanwhile, I hope you will visit these excellent sites:

Energy Bulletin

The Oil Drum


Peak Oil News & Message Boards


Peak Energy (Australia)

Life After the Oil Crash News


Sunday, August 30, 2009

Deep time and the human future

In Basin and Range, the first of several books he wrote on the geography of the United States, John McPhee tries to explain the deep time of the geologist to the reader:
With your arms spread again to represent all time on earth, look at one hand with its line of life. The Cambrian [544 million years ago] begins in the wrist, and the Permian Extinction [250 million years ago] is at the outer end of the palm. All of the Cenozoic [the last 65 million years] is in the fingerprint, and in a single stroke with a medium-grained file you could eradicate human history.

He explains that the average lifespan of a mammalian species is about 2 million years. Depending on how you judge human evolutionary lineage, we are either just getting started as homo sapiens about 300,000 years ago or we are already in our senescence as homo erectus. In either case you are positing a time when human beings will no longer exist. You are positing a limit on the lifespan of the human species.

In doing so, you are inadvertently laying the groundwork for a different sort of relationship with the natural world than the one humans have had in the last 150 years or so, since the advent of fossil fuels. Modern humans often imagine themselves invincible, living as a species forever into the future, colonizing space, and perhaps even escaping the destruction of the Sun many billions of years hence. This kind of thinking--grounded in neither geology nor paleontology nor ecology I might add--has created the rather cavalier attitude demonstrated by modern leaders and their citizenry toward the daunting dangers of climate change, resource depletion and ecosystem collapse. If you think that as a species you are going to live forever, you don't need a Plan B.

But the humble geologist or paleontologist might take a different tack. Rather than assume clear sailing ahead, he or she might check the fossil record and pursue a more modest goal: extending our stay as humans on the planet a little longer than normal. Doing that would require careful attention to the tricks of species that have lived on Earth much longer than humans. Perhaps the most important lesson is that long-lived species don't destroy their own habitat. Sounds simple, doesn't it?

The point of my journey into the deep time of the geologist and paleontologist is not so much to pick up useful tips from long-lived species. Rather, it is to suggest that the way we think about the human future influences heavily what we do day to day in the here and now. The optimists believe we live outside the realm of nature, and we may pay for that optimism with an earlier than necessary demise as a species. On the other hand, those scientists who are in touch with the deep time of the past accept limits on the human journey. It is their way of thinking that provides a path back to a more sensible view of our relationship with the natural world.

Thursday, August 27, 2009

Burning Picassos for Heat

My latest column on Scitizen entitled "Burning Picassos for Heat" has now been posted. Here is the teaser:
Burning natural gas to extract and process oil from the Canadian tar sands has been likened by one industry insider to burning Picassos for heat. But the bidding at the "Picassos for heat" auction may go even higher as those involved in tar sands and oil shale development push for nuclear power to fuel their projects....Read more.

Sunday, August 23, 2009

The show must go on

Paris, But Not France

It is a sign that the world may be upside down when French tourists in Las Vegas take pictures of themselves in front of the Paris Las Vegas Hotel and Casino complex which includes a half-scale replica of the Eiffel Tower. And, yet this is not the strangest behavior I observed recently during a trip to southern Nevada, an area that along with the much of the West is suffering through the worst drought on record.

As a visitor to Las Vegas you could be forgiven for not understanding that the city is suffering a prolonged and extreme drought. Yes, there was a small sign in the bathroom of my hotel room that read: "Dear Guest, Southern Nevada and the West are experiencing extreme drought conditions." It suggested reusing towels as do most hotels now, even those not located in drought-striken areas. But it did not suggest any other measures I might take.

Outside the hotel and in seeming contradiction to the bathroom message, the Las Vegas strip is brimming with so-called "water features," a term taken from geology for naturally occurring water on the earth's surface or underground. But these features are anything but natural. Perhaps the most spectacular is the fountain at the Bellagio Resort & Casino which has water jets that shoot maybe 100 feet into the air and dance to tunes broadcast by cleverly concealed outdoor loudspeakers. (The link leads to a video of the fountain in action though one must really be there to appreciate it fully.) The pool from which this bit of spectacle originates looks like a small reservoir several football fields in size.

   Frank Sinatra and the Fountain

As Frank Sinatra crooned "Luck Be a Lady," the evaporation from the water jets was so great that the Nevada desert air was transformed for a few minutes into something akin to my own muggy Michigan summer atmosphere. My face ended up dripping not from spray, but from condensation--even in the still searing nighttime heat that generally leaves one hot and dry rather than hot and sweaty.

At the New York, New York Hotel and Casino one need only stand outside to experience the Statue of Liberty in a fake New York Harbor complete with a squirting fireboat and a Brooklyn Bridge that you can actually walk over. This "water feature" was one of only two on which I saw a small plaque which mentioned the drought. It read:
New York New York is proud to operate this water feature in full compliance with all drought ordinances. A current water efficiency and drought response plan is on file with local water purveyors.

One wonders about the efficacy of these ordinances if they allow such profligate water use. And, in fact, it turns out that water features at resorts in Las Vegas are exempt from these ordinances. Nevertheless, some hotel owners have responded with extraordinary conservation efforts. MGM is featured in a video on the Southern Nevada Water Authority site for its efforts. (Click on "Conservation" and then "Rebates and Programs" to find this video.) Yet, MGM continues to operate huge water features at its Mirage and Treasure Island hotels albeit with so-called "gray water" generated by guests in its hotel rooms and purified on site for this purpose.

The water authority claims that hotels and casinos only consume about 4 percent of southern Nevada's water. But, of course, they are leaving out all the vendors who sell to and service the hotels and casinos, all the people who work there and thus live in the city's apartments and homes that use water, and all the ancillary businesses that serve the people who work and live in Las Vegas, i.e. the banks, laudromats, car washes, restaurants, day care facilities, schools, and so on.

Las Vegas is built on gambling. Tourism is a major driver behind the city's growth. The people who flock there often find work in the so-called "gaming industry." Without gambling Las Vegas would still be a backwater town servicing ranchers, farmers and the remaining mining industry in Nevada.

Lake Mead's Bathtub Ring

A tourist flying into Las Vegas might be alerted to the actual situation by looking out his or her airplane window to view the noticeable white ring around Lake Mead, a lake created on the Colorado River by Hoover Dam and the source for 90 percent of the city's water. The ring is the result of the deposition of minerals on the lake floor in better times. The 10-year drought has lowered the lake level more than 120 feet from its most recent peak in 1998. The lake is now at about 40 percent of its capacity.

So quickly is Lake Mead falling that an intake pipe which supplies 40 percent of Las Vegas' water may emerge above the lake's surface by 2012. The Southern Nevada Water Authority (SNWA) is working furiously to lay pipe for a new intake that will assure continued supplies should the lake fall below the current intake on schedule. The authority is a consortium of water districts that act together on water issues.

But the new intake may not be enough. A recent report from two researchers at the Scripps Institution of Oceanography calculates that there is a 50 percent chance that Lake Mead will cease to supply water to the millions that rely on it by 2021. They calculate a 10 percent chance that this could occur by 2014 and a 50 percent chance that lake levels will drop below those necessary to generate electricity from Hoover Dam's many generating turbines. Their study assumes no changes in water management. But they hope to prompt radical changes in that management with their conclusions. (For the complete study, click here. It should provide a gripping read for anyone who lives in and around southern Nevada.)

The study's authors indirectly point out that Hoover Dam and the communities that rely on the Colorado River for water have grown up in what might turn out to be a rather wet period in the western United States. They note that average Colorado River flows over the last 500 years are less than those over the last century or the last 50 years. If that is any indication, the West may now be experiencing the new normal. Despite all this Patricia Mulroy, manager of the SNWA, insists that Las Vegas' water troubles shouldn't be cause for limiting growth. She told Reuters that Las Vegas can continue to grow sustainably for the next 50 to 80 years as it changes the way it consumes water.

Mulroy's hopes for continued growth lie north of Las Vegas where she wants to tap groundwater resources currently used by ranchers, farmers and rural communities in the Snake Valley and nearby areas that straddle Nevada and Utah. While driving through areas in southern Nevada and Utah still used for ranching, I was struck by the number of irrigated fields growing feed crops of hay and alfalfa. Even more striking was that the large spray irrigation systems were turned on during the midday when evaporation is at its peak. The midday temperatures were well above 100 degrees when I passed some fields being watered in Nevada.

Much of the West's and the nation's water is used for irrigation. In the United States, the portion of water withdrawals used for irrigation in 2000, the last year for which complete figures are available, was 34 percent, according to the U. S. Geological Survey. This contrasts with 11 percent for what is called public supply for homes and businesses and another 1 percent brought up through private wells, all for household use.

Mulroy complained years ago about the profligate ways of ranchers and farmers in her region and little seems to have changed. Moreover, these same ranchers and farmers are disinclined to share their water with Las Vegas. And, a recent agreement between Nevada and Utah would put the water out of reach until 2019 if both states accept it, something that isn't a forgone conclusion.

Farmers, ranchers and rural residents in the area that would be affected by Las Vegas' groundwater withdrawals fear that their already arid landscape will end up being desiccated. They point to California's Owens Valley where Los Angeles in the early part of the last century secured water rights and shipped the valley's water to the city. Owens Lake dried up and became an alkali flat responsible for local dust storms. Vegetation changed, and farming and ranching declined for lack of water.

Also in question is whether Las Vegas will be able to afford the estimated $3 billion cost of a pipeline from the north since its bond rating is in peril because of the deteriorating economy and the devastating effect that has had on tourism in the city.

   All Dressed Up, But No Place To Go

Meanwhile, visitors to Las Vegas continue to ride in gondolas on fake canals in front of The Venetian hotel. I paced off the length of the ride, and the maximum distance one-way appears to be about 200 feet. But it does include passing under a bridge. There's an interior version, too. Across the street at the Mirage one can enjoy waterfalls with flaming volcanoes that simultaneously deplete water and natural gas. And, there are countless exterior misting systems used to cool off outdoor diners for those who prefer to waste water while sitting down.

You are allowed to wonder why this writer even visited Las Vegas given his previous writings. I was on my way to a family hiking vacation in southern Utah, a vacation generously organized by one family member working in a national park there. Las Vegas was the closest city via air to my final destination. Other family members wanted to stay in Las Vegas a few days before the hiking adventure. In part, it seems this was to offer a subsidy to wealthy casino owners by means of the gambling tables and slot machines. And, I confess that in the absence of anything else to do, these owners received a small subsidy from me, too.

For now the water authorities and the casino owners agree that despite the drought, the show must go on. The city's residents are counting on it. The state of Nevada is counting on it. Perhaps even the whole country is counting on it. But I'm guessing that the small amount I surrendered at Las Vegas' gambling emporiums may come in handy for the city's beleaguered casino tycoons as they are gripped ever tighter by the triple threat of worldwide economic decline, disappearing water and peak oil. These developments are likely to drive operating costs through the roof even as they reduce the ability of customers to pay. That casts doubt on whether a show that supposedly must go on will go on very far into the future.

Photos Courtesy of Olga Bonfiglio
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Sunday, August 16, 2009

Short break

I am taking a short break while I travel this week. I expect to post again on Sunday, August 23rd.

Sunday, August 09, 2009

A thing of beauty

             A thing of beauty is a joy forever.
                                 --John Keats

             The moment one gives close attention to anything, even a blade of grass,
              it becomes a mysterious, awesome, indescribably magnificent world in itself.
                                 --Henry Miller

             It is amazing how complete is the delusion that beauty is goodness.
                                 --Leo Tolstoy

I frequently walk by a nearby lot on which a modest one-story home sits amid a vast sea of the greenest grass you will encounter outside a golf course. The man who lives there with his wife is often tending his lawn: removing weeds, watering, riding his lawnmower. There are a couple of small flower gardens. But mostly it is grass.

The man told me last summer that one month he paid $230 for water. For him the enormous resources in water, fertilizer, and gasoline seem well worth it; his lawn is a work of art. Possibly he learned his aesthetics from a lawn fertilizer commercial or possibly from wealthier neighbors who live not too far from him--neighbors who mostly hire other people to get the same effects. But the origins of these aesthetics do not matter to him. His lawn is a flawless piece of monoculture rivaling the best lawns to be found anywhere in the city.

Americans are quite capable of appreciating the kind of beauty that is not created by man and machine. It is a country with magnificent natural parks and untouched wilderness. And, it was the desire of determined devotees of nature's own aesthetics that such places be set aside for posterity.

We grow up recognizing the natural beauty around us, the rich hues of the flower garden and the deep green of the forest. We are made for this. Michael Pollan in his book, The Botany of Desire, posits that humans and plants are co-evolving. The plants are as interested in enticing us to do things to propagate them as we are in getting them to do things for us. One way they do this is to appeal to our sense of beauty through color and symmetry. Otherwise, how could one explain the human attraction for flower gardens which yield no food?

But we learn to like other kinds of beauty: The kind that leads modern architects to build strangely monstrous steel and glass boxes. The kind that entices drivers to buy stylish, but wildly impractical cars. The kind that causes shoppers to choose perfect tomatoes that are oftentimes perfectly tasteless.

None of this is sustainable. But it is not merely an engineering problem. For those concerned about a sustainable future, changing the reigning industrially-conditioned aesthetic--which is now deeply ingrained in the public mind--will be as much of a challenge as changing the underlying system that created it.

Saturday, August 01, 2009

Burning the furniture

When there is no money for fuel in the middle of winter, desperate residents have on occasion resorted to burning the furniture. That works as long as the furniture lasts. But come spring, there may be no place to sit or sleep, and no prospect of resorting to the same practice should a heating emergency arise the following winter.

Yet, this is more or less the equivalent of what many states and municipalities are doing in the face of our unprecedented financial crisis. They are selling prized assets to private companies in the hopes of plugging current budget holes. This move is predicated on two premises: First, the public will not accept new taxes or should not be taxed during a downturn to pay for maintaining government services. Second, most government officials believe that the downturn is temporary, and that their finances will return to health once a recovery begins.

If the second premise turns out not to be true, then the first one is merely locking state and municipal governments into a long-term liquidation of public assets. One asset sale will begat another and another because such sales appear painless in the short run.

When Chicago's Mayor Richard Daley sold a 75-year concession for the city's parking system to help balance the city's budget, he hailed it as a creative measure designed to carry the city through a rough financial patch. He even promised that the concessionaire, a subsidiary of Morgan Stanley no less, would actually make improvements in the system. The plan has raised the ire of many city residents and visitors as the service and reliability of the system have tanked.

Perhaps most important, public assets serve needs that cannot always return a profit directly. A well-run parking system can focus on making it easy for people to do their daily chores and not feel that they are paying too much for the privilege. That's critical for merchants who must rely on municipal parking to handle their customers. Parking enforcement can even be relaxed when special events or special circumstances such as construction warrant it.

But private concessionaires have no such interests. Their interest is in maximizing their investment within the rules. They will not concern themselves with the broader needs of a city or state. Such has been the case in Chicago where the private parking system company is attempting to maximize its take through strict enforcement and higher parking rates.

On the other hand, Chicago also privatized the Chicago Skyway, a toll road that is still by far the most direct route into Chicago from the east. For a one-shot cash infusion of $1.83 billion, the city sold a 99-year operating lease to a company owned by foreign corporations. In a post-peak oil world, Chicago may actually get the better of this deal. It is hard to imagine enormous volumes of car and truck traffic making their way over the skyway in the year 2104.

Without any apparent sense of irony, the state of Arizona announced that it wishes to sell its house and senate buildings to private interests and lease them back. The state is assuming financial circumstances will improve so that it can retake ownership sometime in the future.

Public assets are the capital stock of a municipality or state. And, that capital stock is used to provide the services that citizens want and need. If too much of it falls into private hands, we will find out the hard way that those private hands are only too willing to burn the furniture for short-term gain.

Not all privatization schemes are bad ideas. But ones entered into with the intention of bailing out the short-term problems of politicians needing a budget fix rather than serving the public better are bound to turn out badly.

Thursday, July 30, 2009

Is Canada becoming a petrostate?

My latest column on Scitizen entitled "Is Canada Becoming a Petrostate?" has now been posted. Here is the teaser:
Canada's increasing reliance on energy exports, especially oil from the Alberta tar sands, risks unsettling its politics and economy and turning the country into a petrostate--an authoritarian society in which dissent is stifled and enterprises beyond the energy sector are de-emphasized or even discouraged....Read more